Written By: Theodora Lau | Founder, Unconventional Ventures
“Mind the gap, please.”
In case you are wondering, this is not referring to the gap between the subway car and the platform – which often times can seem like a big wedge. This is referring to the gap between men and women: the gender pay gap, the motherhood penalty, the funding gap, the caregiving gap, and the domestic work gap. The gap is simply far too real and far too wide. Here are some numbers to help make it resonate:
Women are often penalized in their careers for starting a family, while men are not. This “motherhood penalty” costs women $16,000 a year in lost wages according to an analysis of Census data by the nonprofit advocacy organization National Women’s Law Center in 2018: Working mothers in the US gets paid 71 cents for every dollar their male colleagues make. And obstacles that mothers face extend well beyond pay gap; they include lack of paid maternity leave and child care.2 This contributes to the low fertility rate in our nation, which is at a 30-year low. As a matter of fact, US is the only industrialized country that does not guarantee its citizens paid family leave.3
According to a study from BCG, startups founded or co-founded by women generated 78 cents in revenue for every dollar raised, compared to 31 cents for men.4 However, women face a steep uphill battle in attaining necessary funding: in 2018, US female founders raised $2.88 billion, which constitute 2.2 percent of the $130 billion total in VC money invested over the year – the same percentage as 2017.5
There are over 40 million unpaid caregivers in the US 6, out of which 60 percent are women.7 In order to care for their parents or loved ones, interruptions in careers are common amongst caregivers, with many taking an average of 12-year break8, or only taking a part-time job. Not only do fewer men take parental, family, or medical leave, they also take less time off. This not only results in decrease in savings for women, but also reduces future earning power.
And these are just general statistics on the lack of gender equality faced by women, without taking aging into account. If you are working past 50, you will most likely face the double penalties of age and gender. Women’s participation in the workforce tends to be lower than men at every stage. And according to Financial Times, women also become less likely to work for the top-paying companies as they get older.9
While aging is universal, how we age is not homogeneous. It depends on where we live and how we live. It is also dependent on our gender: Men and women age differently. Women tend to live longer, and hence they constitute a larger percentage of the older population. In fact, in Japan, one of the ultra-aged countries, not only do the number of centenarians hit a record high, nearly 90 percent of them are women.10 Coupled with career breaks, employment inequalities, and pay disparities cited above, women may become less financially secure than men as they age, especially those who have become widowed. With men being the “head of household”, most surviving spouses have not had the chance to establish a relationship with their wealth advisors; it is no wonder that majority of widows change their advisor within a year of losing their spouse when they need someone that they can trust to navigate an immediate period of financial uncertainty.11
As an industry, we need to do a better job understanding the women’s needs – their aspirations, their priorities, their obligations – and their relationship with money. As our society changes and dual-income families become predominant, women are playing a larger role in the day-to-day finances of household, making up to 80% of the financial decisions of the family.12 Do they have what is needed to help them make those increasingly complex choices confidently and effectively – especially when they need to consider the finances and caregiving of their extended families? Are they aware of what benefits they may be entitled to, and how that fits into their overall financial picture? What about transparency between spouses? As financial transactions become digitized, do they have access to joint accounts or those of their late spouses?
Each of us starts getting older the day we were born; but the cumulative effect of gender and age bias against women renders them more vulnerable to financial insecurity as they age. It is time we recognize the role that women play in caring for their families and loved ones, as well as the countless hours of under-appreciated and unpaid domestic housework. The well-being of our future selves depends on it.
How MX Can Help
A big thank you to Theodora Lau for her contribution to this week’s infographic.
At MX, we build products and solutions that help financial institutions really know their customers, so they can provide them with the support and help to resolve societal biases like gender inequality. Really knowing your customers with the right tools and the use of clean data enables you to provide them with the right digital tools to take control of their finances and make better decisions. You’ll also be able to provide them with more relevant product offers and programs that make sense for their financial situation. The use of data helps shed light into customers’ behavioral patterns. And in the case of women, you can use that data to create solutions that give them a better chance to compete against, and eventually, close the gender inequality gap.
Written By: Theodora Lau | Founder, Unconventional Ventures
Unconventional Ventures provides boutique consulting services to drive innovation to improve systematic financial wellness. We connect founders to funders, provide mentorship to entrepreneurs, strategic advisory services to a broad set of corporates, and broaden opportunities for diversity within the ecosystem. https://www.unconventionalventures.com